Archive for Thursday, January 5, 2012

Lawrence’s 2011 sales tax collections rose by $1 million

Lisa Sanders, manager at Bloom, 704 Mass, was rearranging product display on Thursday for a sale at the boutique store.

Lisa Sanders, manager at Bloom, 704 Mass, was rearranging product display on Thursday for a sale at the boutique store.

January 5, 2012


Lawrence sales tax collections

Here’s a look at how Lawrence sales tax collections have grown or declined during the past 10 years:

• 2011 — up 4.3 percent

• 2010 — down 1.6 percent

• 2009 — down 3.1 percent

• 2008 — up 3.8 percent

• 2007 — up 0.9 percent

• 2006 — up 2.6 percent

• 2005 — up 3.5 percent

• 2004 — up 5.4 percent

• 2003 — up 1.5 percent

• 2002 — down 0.1 percent

Forget about that Orange Bowl win. Forget about that National Championship. 2011 was a better year than 2008.

At least from a sales tax perspective it was.

According to a new report from City Hall, Lawrence sales tax collections in 2011 grew by 4.3 percent — or about $1.08 million — compared with 2010. The growth rate is the best showing for Lawrence retailers in more than a half a decade, and ends a two-year decline in sales tax collections.

“We’re cautiously optimistic,” City Manager David Corliss said. “Strong may be too strong of a word to describe the retail activity we’re seeing, but we maybe haven’t seen the downturn that some other communities have seen.”

You have to go all the way back to the heady days of 2004 to find a time when Lawrence sales tax collections increased at a rate greater than 4 percent.

The reasons behind the significant increase are unknown, but theories range from everything from increasing prices for necessities such as food (gasoline, however, is not subject to the sales tax) to just a general mood improvement on the part of consumers.

“Our holiday season went well, and really the year has gone well, too,” said Earl Reineman, vice president at Weaver’s department store downtown.

City Commissioner Hugh Carter, who works in the financial services industry, is subscribing to the pent-up demand theory. Carter thinks shoppers became more willing to spend during the holiday season, in particular.

“There has been a lot of uncertainty, and people have responded by saving their money,” Carter said. “But I think some people realized that this is what they’ve been saving for. I think there is a greater appreciation for what we have in our lives, and I think a lot of people wanted to make Christmas still feel like Christmas.”

The new numbers from City Hall don’t yet fully reflect all the sales made during the holiday season. The city receives a sales tax check each month from the state, but that check reflects taxes collected on sales made 30 to 45 days earlier. Thus, it will be January or February’s check that gives a better indication of how December holiday sales fared in Lawrence.

But the numbers did show increased spending was taking place in October and November 2011. The city’s tax collections during that early part of the holiday season were up 9.4 percent from the same time period in 2010.


Keith Richards 5 years, 4 months ago

If Lawrence is waiting on 30 to 45 days of sales tax receipts, did you just make an estimate for what those days might have collected to get your total and % increase?

Chad Lawhorn 5 years, 4 months ago

No. What we did is we took the 12 payments that the city has received from the state in 2011 and added them up and compared them to the 12 payments they received in 2010. So the amounts in the article represent the amount of sales tax money the city received from the state in 2011. It is basically the difference of cash basis accounting versus accrual basis accounting. Hope that helps. Thanks, Chad

down_the_river 5 years, 4 months ago

So, the numbers show we matched the growth rate of Roeland Park and eeked out a bit of an increase over Topeka. Otherwise, the numbers for Lawrence are the lowest of the major towns in Kansas. We need to be cautious about bragging about these numbers. Food inflation likely plays a role in most of these numbers being up for the year. But how to explain Overland Park's 26.1 percent increase? Is there a tabulation error somewhere at play?

KU_cynic 5 years, 4 months ago

Good news about the tax base and revenue for tax-supported entities.

That said, the cumulative three-year change in sales tax revenue from end-2008 is still negative 0.6%. In other words, sales tax revenues average to less than zero growth over the past three years.

What would be a better prediction for 2012? Another +4.3% growth like in 2011? Leveling off at zero growth (the average for the past three years)? How about 1.7%, the geometric average rate of growth over the past decade?

Is the city budgeting toward a rosy scenario, or a realistic one?

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